Michael Hecht: Make NFIP fiscally sound, affordable

Michael Hecht

Over the last year, it has become increasingly clear that congressional action is needed to address unintended, drastic increases to National Flood Insurance Program rates for home and business owners along our coasts and rivers.

A confluence of the Biggert-Waters Act of 2012 (meant to stabilize the NFIP), incomplete and inaccurate Federal Emergency Management Agency maps, and questionable actuarial calculations has led to premium increases of up to 3,000 percent and more for policyholders who have built to code and never flooded.

Greater New Orleans Inc. has built a national alliance, the Coalition for Sustainable Flood Insurance (CSFI), to address the serious affordability challenges created by the Biggert-Waters Act of 2012. The coalition has grown to more than 200 organizations in 32 states and is committed to balancing the imperative for fiscal soundness with the need to keep flood insurance affordable. Unfortunately, Biggert-Waters Act as it currently stands is a cure that kills the patient.

Our coalition supports a fiscally sound, actuarially responsible NFIP that communicates to citizens their true flood risk. We do not support perverse incentives for building in harm's way, nor do we support the continued subsidization of severe repetitive loss properties. However, we must protect property owners who have built as their government told them. With this in mind, we have a dual goal: To find an immediate solution to the challenges of Biggert-Waters and to develop a long-term solution that works for America.

Encouragingly, a one-year delay of certain premium increases for properties constructed to code after the adoption of flood maps was recently signed into law as part of broader appropriations package. This is a positive step in recognizing the affordability challenges presented by the Biggert-Waters Act.

Now, the Senate is poised to deliver significantly more relief this week when they take up The Homeowner Flood Insurance Affordability Act. This legislation will delay premium increases on policy holders for four years, until FEMA completes its Congressionally mandated affordability study, and Congress considers its recommendations. This is smart, common sense legislation. We urge the House to follow suit and take up this legislation as soon as possible. A four year delay will allow Congress and FEMA to understand the breadth and depth of the affordability challenges presented by Biggert-Waters, and will also allow us the opportunity to craft a long-term solution that balances fiscal soundness with premium affordability.

Unchecked, it is inevitable that Biggert-Waters will be devastating: Owners will lose everything, property values will plummet, bank mortgages will go into default, local tax bases will evaporate, and economies will be eviscerated. To implement Biggert-Waters as it currently stands would be economically unwise and morally unjust.

Let's pause, and get flood insurance right for America.

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Michael Hecht: Make NFIP fiscally sound, affordable

Over the last year, it has become increasingly clear that congressional action is needed to address unintended, drastic increases to National Flood Insurance Program rates for home and business